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Remember when East End businesses harshly criticized former Mayor Bill Johnson for subsidizing the High Falls entertainment district? They said the High Falls area was getting an unfair advantage.

What’s likely about to happen at the Mall at Greece Ridge Center is along the same lines. Wilmorite stands to get $3.6 million in property, sales and mortgage tax abatements over the next 30 years. Many restaurants in town (or their landlords) don’t get this kind of help, but we’ve gotten numb to subsidies for the big box retailers.

Unfair competition is one reason skeptics oppose tax breaks for retail. Another reason is the jobs are often part-time and pay low wages. Finally, unless retail is in an economically disadvantaged place, the development is likely to occur anyway. (Wilmorite has said in the past, it cannot do these types of mall upgrades and stay competitive in the industry without taxpayer help.)

Greg LeRoy of Good Jobs First said this country has a glut of retail space. “Retail isn’t economic development. The only time (incentives) are justified, is a neighborhood that’s been demonstrably red-lined.”

West Ridge Road, packed with businesses, isn’t a disadvantaged and isolated neighborhood. Meanwhile Greece and other municipalities and school districts are squeezed for cash.

A 2011 study found St. Louis spent billions on retail incentives with very few gains in jobs or sales tax. The problem is we don’t suddenly have more money to spend just because more stores open.

“If you want retail to succeed, make sure people have good paychecks,” said LeRoy.

But then you look at Medley Centre and ask, “If this project doesn’t happen at Greece Ridge, will we end up with another Medley Centre?”

I don’t know. But it’s legitimate to ask what is the role of the taxpayer.

7 Responses to Subsidizing Stores

  1. February 6, 2012 at 5:08 pm Michael responds:

    If Wilmorite was willing to share some of the profits in exchange for tax beaks, why not. But that’s not how it works. They want the taxpayers to sudsidize their business so they make more money. It is not fair to all the other business owners who don’t get such special treatment.

  2. February 6, 2012 at 5:28 pm Charles responds:

    Not only is it not fair to other business owner’s but it is unfair to the taxpayers. I don’t think it is our job to help business through subsidies but to help through being the consumer. If a place of business is selling things people want it won’t need subsidies.

  3. I don’t know how much I can add here, except that maybe these breaks they have received, and the fact that they do not add many, if any, decent jobs to the community do more than just keep money out of the coffers directly.
    When they get these breaks, as you pointed out, the schools suffer. Property values are influenced by the quality of the schools. If those values go down, and the houses are reassessed fairly (insert somewhat deserved cheap shot at assessors here) then tax revenues go down even more. If properties are not fairly assessed, people leave, and tax revenues go down.
    I don’t get why people fall for the “we need to offer them tax breaks to attract them” line of thinking with any business. These businesses have to operate somewhere. A few businesses act in the “ether” of the internet, but restaurants, retail chains and manufactures, just to name the most obvious need a physical presence. If communities stopped letting them pit us against each other, they would have to pick a spot and pay their fair share like anyone.

  4. Have there been any times where the city rescinded tax abatement? Can someone please suggest this to save the local budget? (I unfortunately do not live in the city proper.)

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